Without limiting the scope of the present invention, this background of the present invention is described in connection with adaptively managing investments. The present invention, however, is not limited to the management of equity investments, such as stocks, and is applicable to the management of any type of investment that can be characterized by a series of measurable parameters.
Most computerized investment management systems select one or more specific investments and manage those investments based on quantifiable market conditions and trends. With the advent of computers and modern telecommunications, the amount of information that is available about a specific investment and the market as a whole at any given time is enormous. Accordingly, most investment management systems monitor and use only a selected portion of the available information to make investment decisions. For example, the change in an economic or market index, such as the Dow Jones Industrial Average or the Standard & Poors 500, may trigger an investment management system to automatically sell a certain percentage of its holdings. Moreover, the information monitored and the decisions based on that information are typically fixed within the investment management system. As a result, these systems only react to the market. And the information monitored or the decisions based on that information does not adapt to changes in the market, except through "human intervention."